Renewed concerns about the outlook for advertising saw the share prices of newspaper groups suffer yesterday.

Johnston Press , which also traded ex-dividend, led the sector lower, falling 8.2 per cent to 126¼p after negative comments from Cazenove.

The broker said recent results from Gannett, which owns Newsquest, highlighted the growing pressure on earnings at UK newspaper groups.

On Monday, Gannett reported figures that showed classified advertising at its UK titles had fallen 11.7 per cent in the first three months of the year.

"While this is well recognised, we still see near-term risks to the downside and would stay cautious ahead of trading updates," Cazenove said.

Trinity Mirror , which is due to issue a trading update on May 8, shed 4.1 per cent to 226¾p while Daily Mail & General Trust lost 5.3 per cent to 422¼p.

In the wider market, leading shares staged a late recovery to close higher

Down 55 points at lunch time, the FTSE 100 bounced back to close 48.9 points, or 0.8 per cent, higher at 6,083.6. The catalyst for the turnround was gains on Wall Street. Elsewhere, the FTSE 250 rose 18.1 points, or 0.2 per cent, to 10,087.7.

Oil stocks were among the best performers. With the crude price remaining close to record highs, Royal Dutch Shell added 3.5 per cent to £19.53 and Cairn Energy moved up 3.1 per cent to £31.43.

Tullow Oil was also in demand, rising 4 per cent to 761½p amid rumours of a big find in Uganda.

BAE Systems added 2.9 per cent to 472¼p after a push from Citigroup. Analyst David Perry said he did not believe a Serious Fraud Office investigation would be reopened and that Saudi Arabia could accelerate a £10bn equipment contract.

Xstrata added 2.6 per cent to £41.01 on the view that it is one of the few major mining companies that could be acquired by China.

Banking stocks remained in the doldrums as investors continued to fret about the prospect of further equity fund raisings. Royal Bank of Scotland , which unveiled a £12bn rights issue on Tuesday, fell a further 3.6 per cent to 345p after Morgan Stanley lowered its target price to 260p.

"We see the RBS rights issue as a recession indicator that should be used as a negative read for the whole sector earnings outlook," Michael Helsby, analyst, said.

And it was. Alliance & Leicester , also trading without entitlement to a dividend of 36½p, lost 7.5 per cent to 491p while HBOS lost 3.9 per cent to 500p.

Traders noted that HBOS shares were now only 50p above the level at which directors, led by Andy Hornby, chief executive, bought stock a month ago.

Barclays eased 1.1 per cent to 455¾p ahead of today's annual meeting.

Meanwhile, Cazenove said it expected Barclays to accelerate plans to increase capital ratios.

"Achieving a 6 per cent equity Tier 1 ratio by the end of 2008 would require a 13 per cent reduction in risk weighted assets or £4.3bn of capital," it said.

Housebuilders were hit by further selling after the British Bankers Association said mortgage approvals had fallen to a record low in March. Persimmon eased 1.8 per cent to 650p while Redrow lost 4.3 per cent to 274p and Barratt Developments , which was also trading ex-dividend, dipped 4.5 per cent to 331p.

British Airways eased 2.4 per cent to 205p. Overnight, US airline stocks took a battering, with United Airlines the hardest hit. Its share price dived 35 per cent after the company said losses had tripled due to rising fuel prices.

Johnson Matthey , the precious metals and catalysts group, gave up 2.3 per cent to £19.76 after UBS downgraded to "sell". The broker said JM was overvalued given the slowdown in the automotive sector.

Among the mid caps, Go-Ahead , the bus and rail operator, fell 3.5 per cent to £14.76 after UBS issued a "sell" rating citing concerns about rising fuel prices.

At results in February, Go-Ahead said it was only hedged for fuel until June 30 and earnings guidance was based on a fuel cost of 35p a litre.

Shire rose 6.6 per cent to 979p after its hyperactivity drug was approved for use in adults by US regulators.